Wednesday, June 19, 2013

I ran into a lengthy cost-benefit analysis of nuclear power this
morning by someone who has a "passion for creating a low-carbon future to
address the threat of climate change". (I do not share his passion.)

The author raises a good point that advocacy of
a given power source should be based on good accounting. That's a good start,
but as I skimmed his article, I noticed a couple of points.

First,
he notes the following about nuclear power, which he claims is on its way out:

Even while the nuclear industry is able to externalize its costs
for insurance (which are federally limited), loan guarantees (which are
federally backstopped), decommissioning (which is pushed onto ratepayers) and
waste handling (which is pushed onto taxpayers), it still lost. If it had to
stand on its own and pay its full insurance costs like every other energy
source, we could never build another nuclear plant in America, because no
private investors would be willing to take that kind of risk. It's hard
to imagine how the economics could be more tilted in nuclear's favor
(although I'm sure its proponents have ideas on that).

I am no fan of the government handing out favors to any industry, but I am
likewise not a fan of the government imposing higher costs through regulations
on any industry, either. I didn't have time to read this article thoroughly,
but I can think of any number of ways (e.g., environmental impact studies) that
the government is making the production of nuclear power more expensive than it
should be. Setting aside the faulty
premises of such cost-benefit-analyses, regulatory hurdles (and their unintended
cosequences) immediately make the numbers suspect.

Later in the
article, the author states that "[t]he reason nuclear is dying is economics", and that:

Meanwhile, outside the fantasy world inhabited by the [Breakthrough
Institute] the real energy market has moved on. The US installed 13,200
megawatts of wind capacity in 2012, according to Bloomberg New Energy Finance.

Furthermore, the author notes that the amount of wind generation capacity installed last year more than replaces the combined output of four nuclear plants headed for retirement.

Again, I haven't read this article
thoroughly, but it raises a couple of good points: (1) It could
be entirely correct: Nuclear power -- in the context of our
government-distorted economy -- could well be a more costly way to produce
power than, say, solar or wind (regardless of what might hold in a free
economy); and (2) The very fact that different forms of power have "promoters"
based on their desire to influence government control of the economy, and who
have agendas other than what form provides power the most inexpensively shows
us just how far from capitalism (and a culture that values individual
prosperity) we have come. We shouldn't be trying to persuade each other of what public utilities should be using to create electricity, but individually weighing how to get power at the least cost and the greatest suitability for our own purposes, whether that involves buying it from a company or obtaining the equipment to generate it ourselves.

This article at best provides data that is of mainly
diagnostic value with respect to how badly distorted our economy is.